Obama also tackled an issue that's of interest to tech startups: patent trolls.

An entrepreneur told Obama she had friends who were interested in starting new tech companies but feared being targeted by software patent trolls.

Obama had strong words about patent trolls, a derogatory term for companies that make most of their money from patents they own – either by licensing them or filing patent litigation.

"They don't actually produce anything themselves," Obama said. "They are essentially trying to leverage and hijack somebody else's idea and see if they can extort some money out of them."

Obama pointed out that Congress passed patent reform during his term but said, "Our efforts at patent reform are only about halfway to where we need to go."

The America Invents Act that Obama signed in 2011 aimed to cut down on costly patent litigation, but it contained just one minor provision aimed to cut down on patent trolls, Ars Technica has pointed out. Under the patent law, it's tougher to name a huge amount of defendants in a single suit.

The law's biggest change was granting patents to the first companies or people to file patent paperwork rather than the first ones to invent something. The change from a "first to invent" rule to a "first to file" rule is not likely to have any impact on trolls, according to Ars Technica.

Obama acknowledged Thursday that we need "smarter patent laws" so startups have an incentive to keep innovating. He seemed open to some kind of expiration date on patents.

But, he added, "We also want to make sure the patents are long enough that people's intellectual property rights are protected."